- The Washington Times - Sunday, April 17, 2005

ASSOCIATED PRESS

Finance officials from the leading economic powers pressed ahead yesterday on efforts to wipe out poor nations’ debts and hoped to complete a deal later this year.

Officials insisted they were making progress even as they concluded two days of talks without a deal. But international aid groups, disappointed by the failure to complete an agreement this weekend, accused the major industrialized countries of obstruction and said further delay could worsen the plight of the world’s poorest people.

Erasing the crushing debt load was among the issues discussed by finance representatives at the meetings of the 184-nation World Bank and the International Monetary Fund.

The concept won the endorsement of financial leaders from the world’s seven wealthiest countries — the United States, Japan, Germany, France, Britain, Italy and Canada — who met Saturday in Washington.

The United States and Britain have offered competing plans, but officials have failed to settle differences, mainly over how to pay for debt relief.

Under the U.S. approach, the poorest countries would not have to repay loans to the World Bank, the IMF and the African Development Bank. The Bush administration also wants future aid to come in the form of grants, which do not have to be repaid, rather than loans.

“Our proposal not only drops the debt of yesterday, but prevents debt from burdening countries again well into the future,” Treasury Secretary John W. Snow said yesterday.

Critics say that deprives the lending institutions of additional money to compensate for forgiven loans.

Britain’s proposal would rely on a greater financial commitment to the World Bank and the IMF by rich nations.

Some outside advocates want the IMF to sell part of its massive gold reserves to pay for the debt relief. The United States does not favor that.

Finance officials thought their work this weekend would lead to a deal at a summit of world leaders in Scotland in July.

World Bank President James Wolfensohn, an accomplished cello player, compared the situation to an opera in which the themes are introduced in the overture, but the flourish comes in the arias sung later by the stars. That was a reference to President Bush and the other heads of state at the Group of Eight summit; the G-8 is made up of the seven richest countries, plus Russia.

Mr. Wolfensohn summed up this weekend’s session by saying, “My bottom line is this meeting is not the aria. But I do think it is a decent overture.”

It was Mr. Wolfensohn’s last meeting as chief of the development bank. He leaves at the end of May after 10 years at the helm. Paul Wolfowitz, deputy U.S. defense secretary and an architect of the Iraq war, will take over June 1.

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